CONSUMER FOCUS RINGS A BELL FOR AT&T'S GRAY

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LONDON-Only last year, David Gray, then worldwide managing director on the Pirelli tire account, spent six weeks at Young & Rubicam here hammering out a credentials and strategic pitch for AT&T's $50 million European business. The pitch was lost to McCann-Erickson.

"We got over the disappointment of not getting the [AT&T] business, and I was sitting here one day and the telephone rang," Mr. Gray said. "A headhunter described a job, and I said, `Is that AT&T looking for a head of advertising?'*"

Mr. Gray, 49, starts the newly-created job of international advertising director for Europe, the Middle East and Africa for AT&T at the end of this month. He will be based in London rather than AT&T's European headquarters in Brussels.

"I've got a blank canvas," he said. "It's about establishing the brand very firmly" in those three areas.

Mr. Gray is one of a growing band of recruits to high-tech companies seeking expertise in consumer marketing rather than a technology background. The logic is that as markets become more competitive, technology companies are depending on a broader base of customers.

The movement, said Mr. Grey, is "about the end consumer benefit." He added, "Even in business-to-business, there has to be a consumer benefit, and these companies are becoming more consumer-oriented."

AT&T is in the enviable position of already having a sizable business in the U.K.

The company was granted a telecommunications license by the U.K. government in December 1994 that allows the U.S. telecommunications giant to expand into new services in the U.K., Europe's most liberal market. And continental Europe is on the brink of a communications revolution.

State-owned telecommunications monopolies are scheduled for European Union-mandated deregulation by 1998, opening up major markets like France and Germany to competition for the first time.

But AT&T suffers from a comparatively low profile in Europe and has done little brand building at a time when telecommunications advertising is booming.

Business press readers, for example, are likely to be more familiar with ads for Concert, a new telecommunications alliance formed last year by British Telecom and MCI, rather than AT&T ads. U.K. TV is teeming with spots for the U.K.'s latest phone company, Energis, a new competitor to British Telecom and Mercury Communications.

By comparison, AT&T's most visible campaign is probably for AT&T's USA Direct and World Connect calling cards, advertised daily on the back page of the International Herald Tribune.

"[AT&T] is really at a stage, and the marketplace is at a stage, where it needs to be creating a real focus on the brand and the services of that brand," he said.

In the U.K., AT&T has about 75,000 calling card customers and offers corporate private line services that are effectively customized networks allowing, for example, phone calls to be made by dialing only four digits. AT&T also provides 70% of the U.K.'s automatic teller machines through its Global Information Solutions subsidiary (formerly called NCR).

In addition to being more liberal than others in Europe, the U.K. market is unusual in that it is home to a large AT&T customer base. An AT&T spokesman said that about 14% of multinational companies have headquarters in the U.K., compared to 30% in the U.S. and 7% or 8% each in France and Germany. The U.K. is also the third heaviest market for phone traffic from the U.S. after Canada and Mexico, he said.

"We are looking at offering services to large corporate users and, as time goes on, to consumers with heavy demands for telephony and fax," the spokesman said. "Nowhere else in Europe can you compete for basic voice telephony services."

Pierre Carlo Falotti, AT&T's president-Europe, outlined his vision in the region at a recent three-day AT&T European sales conference, but for the moment AT&T is guarded about revealing details about forthcoming plans.

In his new job Mr. Gray, who got to know Mr. Falotti during last year's pitch, will be working with McCann-Erickson throughout Europe.

Meanwhile, his former agency Y&R won simultaneous regional pitches for AT&T last year in Asia Pacific and Latin America-losing only Europe.

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David Gray

BIRTH: January 24, 1946

EDUCATION: Left school at age 18, turning down a place at Oxford University to travel through Europe for nine months.

CAREER: Currently international advertising director for Europe, Middle East and Africa. Previously worldwide account managing director on Pirelli at Young & Rubicam, 1992-95. Managing director of Lowe Group's Allen Brady & Marsh, 1989-91. Joint managing director of Yellowhammer Advertising, 1980-89. Account manager at Collett Dickenson Pearce, 1969-80. Started career as management trainee, then salesman at Gallaher Ltd. tobacco company in 1965.

FAMILY: Married; daughters ages 13 and 2, twin son and daughter age 8, fifth child due March 1995.

HOBBIES: Tennis, music, collecting Georgian glass.

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